UK's trade deficit with the EU swells to a record in December

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Jessica Morris

Trade between Britain and the EU is coming under increasing scrutiny ahead of the in/out referendum (Source: Getty)

Britain's trade deficit with the EU has swelled to a record, as Britain continued to export less goods to its European neighbours.

The Office for National Statistics said the UK's good trades deficit with the EU widened to £8.1bn in January, from £7.4bn a month earlier.

But Britain's trade deficit with the wider world narrowed to £2.2bn from £3bn during this period.

This helped Britain's total goods trade deficit narrow to £10.3bn in January, down from a revised £10.5bn in December.

Trade between Britain and the EU is coming under increasing scrutiny ahead of the in/out referendum on June 23. The EU accounts for around half of the UK's exports, and economists have warned a so-called Brexit could dent its growth.

The surplus in services meant the overall trade deficit narrowed to £3.5bn in January, from a revised £3.7bn a month earlier.

"UK exports have struggled in recent months, as they have clearly been hampered by sterling’s overall strength in 2015 (particularly against the euro) and moderate global demand," Howard Archer, chief economist at IHS global, said.